Rex International to Divest Stake in Two Norway Assets

Rex International Holding, the leading oil and gas
company, has announced it would be divesting its stakes in two Norway assets.
The oil and gas company is selling 30 percent stake in the Rolvsnes discovery
in PL338E, PL338C, and 20 percent interest in the Goddo discovery in PL815 to
Lundin Norway.

The transaction will be completed in two payments
which will involve a cash consideration of $43 million which will be followed
by a contingent payment of approximately $2 million within the 12 months of
completion of divestment only if no adverse event materialises. Rex revealed
that the deal has to still be approved by the concerned government and
regulatory authorities.

The deal was finalised on the basis of the unaudited
net asset value of the two Norwegian sites which was estimated to be about more
than $13 million in September 2018.

Rex plans to use the revenue generated from
divestments towards production and exploration activities. The company is
planning to begin exploration and production activities in the Norwegian
Continental Shelf. Rex also plans to use the proceeds towards maintaining a
high stake in its Oman license. The company revealed that the sale is in line
with the company’s internal business model which calls for selling of mature
assets.

As far as the assets are concerned, the resource
capacity of the Rolvsnes site is estimated to be in the range of 14 to 78
million barrels of oil while an exploration well is scheduled to be drilled at
the Goddo site in 2019.

Following the divestment, Lime Petroleum, a subsidy
of Rex International will continue to hold a 20 percent stake in the Norwegian
Sea license and 30 percent interest in two North Sea licenses. The North Sea
Licenses are crucial to the company being located in the Utsira High, a region
in the Norwegian Continental Shelf where exploration and discovery can be
fast-tracked owing to its close proximity to the existing oil and gas
production infrastructure.

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Mohit Loshali

Mohit Loshali, an experienced campaigner, writes about the latest evolutions and trends in the automotive and allied domains. He has helped clients from across the globe with his thought-provoking research and analysis.